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tv   First Business  FOX  November 23, 2012 4:00am-4:30am PST

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you're watching first business: financial news, analysis, and today's investment ideas. good morning everyone, i'm angela miles, and here's what's happening in today's edition of first business. preparing for the end: we'll get a rundown of some of the end-of-the-year trades. plus, what former groupon employees have to say about the drop in the company's stock. fizz and flights come into
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focus in today's traders unplugged. camera conflicts: is it right for cameras to watch you while you work if it means better results? see what our investigation reveals. plus, can your portfolio benefit from what's happening in congress? keep it here and find out. but first, let's take a look at what the traders have to say. we are looking at the end-of- the-year trading with scott bauer of trading advantage this morning. scott, what do you anticipate? > > you know what angie, i really think that people that have stayed in the marketplace the entire year, have just ridden out the rally that we saw this year and did not reduce their positions, did not exit out earlier when we saw some of the higher points in the market, i think there is going to be some profit-taking. i don't really believe that it is going to be all that severe. but why wouldn't you want to take some money off the table at the end of the year and maybe start over a little bit? so i wouldn't
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be surprised if we do see just a slight sell-off really just due to maybe some of the funds in retail, taking profits off the table. > > and what are traders thinking about 2013, scott? > > you know, it is all about the economy at this point. if we can continue, especially in the housing market, if we can continue seeing, not a booming housing market, but the upswing that we saw toward the last quarter of the year, then i think that is going to be the lead of the market. i don't think people think, or traders on the floor think that we are going to see a big 15, 20% move in the s&p upward this year. but i think what is going to be the mantra, the theme of these guys, is we are going to see a grind, maybe an 8-10% appreciation throughout the year. keep this in mind: 1600 is not that far away, and that is a number a lot of guys are looking at. > > what about money managers? aren't there certain stocks that they must own by the end of the year? > > there are, and those are stocks like the apples of the world. if money managers
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weren't into apple, they've got to get into that, and in some of the other s&p stocks and in some of the dow stocks. so you may see money changing hands, people taking profits out of apple, and these money managers having to get in, and the like. > > got it. thanks very much. that's scott bauer of trading advantage . some call it big brother - video cameras watching over you while at work. but it's producing safer food products from the beef industry and better hygiene among healthcare professionals who sometimes forget the basics, such as washing hands after treating patients. the company that makes camera systems that watch over you says they're also watching out for you in terms of consumer protection. that's according to adam aronson, whose company, arrowsight, watches by remote camera half of the beef industry and meat processors such as osi. "if osi can improve productivity by 10%, there's opportunities for other industries like this."
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it took the largest meat recall in history in 2008 to bring cameras into meat packing to the extent that exists today. in three years, arrowsight went from having cameras in one meat packing facility to 30 of them - not to mention other manufacturers and fast-food restaurants. "it sounds big brother-ish. that's usually the first comment we hear, and it's the right question. we're trying to get people to do a better job." aronson admits management requests cameras, not workers. but when it comes to improving efficiency, faster is not always better. half the time, a manufacturing line's speed is slowed down to improve quality control. in hospitals such as north shore university hospital on new york's long island, cameras monitor how often healthcare workers wash their hands. "they were really washing their hands less than 10% of the
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time." aronson says within a matter of weeks, hand hygiene - key to preventing the spread of infection in hospitals - improved 80% and stayed that high during a year-and-a-half of periodic checks. as far as employee representation, he says no union has blocked arrowsight from installing cameras to monitor employees. in less than one year, online coupon company groupon moved from massively hyped to a mostly forgotten $4 stock. paul eggers takes us behind the scenes as former groupon employees vent over the rise and fall of company stock. groupon's stock chart is not a pretty picture. from its opening on the nasdaq in november of last year to today, the stock has dropped more than 80%. during that time, while traders quickly sold off their shares, former employees of groupon like jason bowman were barred from trading their options on the open market until june. "at one point during the lockout, it was about $30, and
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people were saying, 'boy, this could be something.' and then it went down to $7 and people said, 'boy, what happened to all that money?'" groupon alum dan knispel also was forced to sit on the sidelines as the value of his shares plummeted "i'd say it was rough, from time to time, especially as the number got smaller and smaller." like many early groupon employees, both bowman and knispel took a little less in upfront salary to get equity options in the firm, a decision which looked good when google nearly bought groupon for a reported $6 billion figure in 2010. "i mean, you're just thinking big. you're not thinking money after taxes or anything realistic, you're just thinking, 'i'm going to get a windfall of cash and this is going to be amazing!'" "it's not a new story for tech employees to have their options underwater. it's just kinda the breaks." in his book "groupon's biggest deal ever," frank sennett details how founding partners like eric levkofsky cashed out some of their shares before groupon's ipo, pocketing
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hundreds of millions of dollars in the process. "they're the early-stage founders, they're the ones driving the bus. and there are all sorts of lessons that life isn't fair and that's one of them." though the rank and file still holding shares do have at least some hope for some kind of bonus. 'you know, at this point, you may have lost 66%, maybe 75%. is there a chance you're going to lose that extra 25%? yes there is, but it needs to go down another 100% from here.' knispel has pretty much cashed out 'i didn't get to buy a plane or a boat or anything' and bowman has moved on as well. 'i did have the cash to rebuild the garage for my house because it was falling apart. not sexy, i know, but sexy enough for me. it is going to be a good- looking garage.' it's important to note that despite seeing the stock move against them, both bowman and knispel view their time here at groupon as a positive work experience. reporting outside the firm's chicago headquarters, i'm paul eggers, first business news.'
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brian bolan of zacks equity research is optimistic that groupon stock can work its way back to its ipo price, but warns it could take a long time. after serving in active duty, many veterans are having a hard time translating their military experience into terms that hiring managers can apply to the civilian workplace. today, our cover story takes a look at a new effort to help both parties meet somewhere in the middle. tank operators. you know what they do in iraq and afghanistan. but how do you transfer this into a job back home? "most hr people who've not been military don't understand that a tank operator is also a computer operator and team leader." now, h-r plus, a part of security firm allied barton which checks backgrounds of job candidates at job fairs and elsewhere, is helping veterans highlight their value. "if veterans could learn how to market themsleves better, understand the buzzwords
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business wants to hear, i think they'd be more successful." this effort in conjunction with a defense department program called the employer support of the guard and reserve targets national guardsmen and woman and reservists who've returned from active duty. but there are many websites to help all veterans, such as, which provides a free military experience translator. "at the same time, employers need to look beyond the resume and see the leadership and other qualities that the national guardsmen and women or any veteran brings to the workplace." recently overseas, in places where the u.s. military has been a presence, members of the national guard and reserve have played a significant role. just one example - since 2003, roughly 3/4 of the men and women in illinois' national guard or reserve were mobilized throughout the world. h-r plus is a company that puts its money where its mouth is
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concerning this issue. 40% of the roughly 8,000 employees it hires a year are veterans. still to come, how to pitch your ideas to angel investors. what investors want to hear before they reach for their checkbook. but first, traders tell us which soda stock is more likely to see a pop. that's next, in traders unplugged.
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the holidays are on our traders' minds today. joining for us for traders unplugged, pro traders alan knuckman and jared levy. round one: taking flight. millions of americans are boarding jets this season for the holidays. which airline stock is ready for lift-off? > > i look at this in a couple of different ways. i have never liked airline stocks because it's- > > tough sector. > > you have a tough sector, you have gasoline prices to deal with, and obviously you have the ebb and flow of the consumer. i think the place to look here are the booking sites, the pricelines, the expedias of the world. those are always, i think, going to prosper, where people are looking for cheap flights- > > and guess what, they don't have to pay for a plane, and they don't have unions to deal
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with, pilots and so forth. i like boeing. i think boeing is doing some amazing cost-cutting things. yes, there is concern about the defense industry retracting or not growing as fast as people have thought, but they are looking to bank about $4 billion in cost- cutting savings. they are laying off 30% of the middle managers. so guess what, that's really going to help the bottom line. > > as a pilot i support boeing as well. > > round two: coke or pepsi. which is the better stock buy? > > that is all you drink is coke. > > i love coke. i am a coke person. i have coke in my blood. there is solid support at $30, $36 or so in coke. and right now we are just a little bit above that. so you can buy some long-term options that have about six months, and the volatility is very, very low. so it's an easy way to play for a global recovery. > > i think it's not just about the original products themselves. what you need to look at are some of their tertiary and secondary products. look at stuff like the energy drinks. monster beverage company: both coke and pepsi have a lot of multiple brands. take a look at how brand strength is doing. i think there is going to be an influx of folks looking for more healthy drinks.
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> > vitamin water was a big acquisition. > > vitamin water, big one, yes. > > vitamin water. round three: home for the holidays. home ownership is said to be at a decade-low. is that a good sign or a bad sign? > > you have a lot of pent-up demand. and don't forget, rent rates are at some of the highest levels they have been at in something like five or six years. and in fact, just over the past two or three years, rent rates have gone up about 20 to 25% in major cities. i think folks with low interest rates, once they start to see those stick up with some of the presidential policies in place, we could see a drive for home ownership. > > that's true, because we have seen rates dive below 3% as far as the yield on the 30-year, so that is a falsity right there. but i just want to point out that home prices jumped 5% in september. they were up in 81 cities. largest year-over-year increase since 2006. so the housing market is coming back. now i will say this as a negative for the consumer, though: the consumer is usually wrong. they usually sell when they should be buying and buy when they should be selling. that is just human nature. and this is actually a bullish sign for me, the fact that people haven't jumped back in the housing market. > > i agree there. > > bonus round time: ticker time. name the famous company that trades under the ticker
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symbol: hog. > > that is harley-davidson. [cheers > > good to have you on the show. thanks for being on. still ahead, it's estimated 250,000 investors are looking to give money to new ideas. find out how yours could be one of them. that's next with bill moller.
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you've got the perfect idea -
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you just need an investor. the government figures there are around 250,000 angel investors out there, all looking for people - maybe like you - with good ideas. they want to write checks and bring your idea to life. you have one, you really believe in it. so what do you need to do to get an angel investor to actually invest? let's talk with janet tavakoli, she's an investment risk analyst, and you're also the president of tavakoli structured finance. most people who knock on your door, do they end up blowing it when they pitch you? > > they do bill, because they walk in unprepared. they may have a product, they may have an idea, but they haven't yet gotten the patent. they don't have a business plan. they don't know who their competitors are. they don't know who their target market is. > > do they sometimes make big promises - "oh, it's going to be a billion-dollar seller." > > yes. in fact i had one game app developer come to see me who didn't have a patent on his product, he had outsourced the work to the ukraine and to pakistan, so he hadn't done any
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of the work in the united states. he had done things that would disqualify him for the angel tax credit in illinois, where i would be investing. and in his mind, none of that mattered because he was sure that facebook or yahoo would buy his company for a billion dollars. > > so tell me janet, what do you do to present your strengths? what do they have to have in place? > > well, i think the first thing is, when people walk in the door, they should id themselves, because they're strangers to me. i don't know where they went to school, where they came from, and that's the most important thing. i am this person, and here is my product. if there's ever a time in your life to brag, this is it. if you've got a product and you love it, and your friends and your family like it- > > show enthusiasm. > > show some enthusiasm for the product. explain how it works. explain how you use it. explain how the users that you've given it to have used it. what they love about it. what i'll love about it. > > maybe the fact that it already has some traction out there. > > that's really important,
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because people who have designed a product need to have some idea and an eye for business. and the first thing you need to know is, do i have intellectual property that i can get a patent on? because you want barriers to entry. you don't want something that everybody can copy. because then it's really not worth anything. so you want to get your provisional patent. if you don't have the patent, say you need help in going through the steps to get a patent, if it is patentable. and you need to know who your competitors are, has anybody else already built something like it? so you have to do a little of that research on your own before approaching angel investors to show that you have something that's valuable and that's worth investing in. > > all right, i've got an idea. let's get off camera, i want to talk to you about it. you bring your checkbook along with you? > > i didn't bring it with me, but that is no problem, because that can be remedied very quickly if the idea is a good one. > > very good. janet tavakoli. thanks so much. > > thank you. thank you, bill. still to come, how decisions on capitol hill impact your portfolio. how to make it work in your favor, next.
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how much does congress play into your portfolio? perhaps more than you think. eric singer is the author of the new book "trade the congressional effect." he shares the secrets behind his congressional fund. how does your fund work? > > i went back and looked at the stock market going back to 1965 day-by-day, and i found that on the 7900 days that congress is in session, the market went up less than 1% annually in price. and on the 4100 days they were on vacation, the market has gone up 16% in price. so i launched a mutual fund to mimic that, and that's the strategy of the fund. we only invest in the market on the days when congress is on vacation. > > that's interesting. your fund is up 2% for the year. what does that say about our
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lawmakers? > > it says that this year they're having a little bit better year than most years. but, while the fund invests on a day-to-day basis, it's really a long-term approach. in 2008, most funds, the average fund was down 40 or 43 percent that year. this approach we were down 2% that year. so the purpose of this fund is to avoid the risk that congress creates when they change the healthcare laws, when they change the banking laws. in our fund investors don't have to worry about the rules being changed for an industry because we're trying to sidestep that. > > how do you plan to utilize this so-called "fiscal cliff" and possibly make money with your fund? > > the goal of the fund is to allow people to get most of the return of the s&p while taking half the risk, and right now we have a quarter of the correlation with the market. so, this is an ideal time to invest in the fund. when congress comes back into its lame-duck session, we will be
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flat when they are in session. but there's a lot of risk in this lame-duck session. the fiscal cliff is not resolved, i don't think it's going to be resolved during the lame-duck session. asia seems to have economic slowing problems, and maybe a little saber rattling - the same for the mideast. it's really kind of a dangerous time in the market, and this is a fund that is unusually low- volatility, low beta fund, so it's a place where you can get some relative safety. > > eric singer. thanks for joining us today. > > thank you. we are out of time for today. check back in with us every weekday morning, and you can also find us on facebook and twitter. from all of us at first business, thank you for watching.
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the black friday frenzy under way already here in san francisco. hundreds of people waiting in line outside one store here. we'll tell you what kind of deals got so many people up early. and a firefighter injured and more than a dozen people
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without homes. possible cause of a big apartment fire in san jose. a fun night at a san rafael nightclub turns violent. the investigation into the midnight shooting. it's all ahead. good morning, to you. it is friday. welcome to the morning news i'm claudine wong. pam cook and brian flores have the morning off. steve paulson is here with your shopping forecast. >> we do have mostly clear skies. a little chill in that morning air. it will be sunny to mostly sunny today. enjoy the temperatures if you liked yesterday you will like today. here is tara. thank you. right now we will take a look outside. and a look at 880 near the
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